News in brief 15th September 2016

The end of the CLSB?

The Legal Services Board (LSB) this week raised the possibility of the Costs Lawyer Standards Board being absorbed into a single regulator for the entire legal profession, and of a review considering whether bill drafting should be a regulated activity.

On Monday it published its blueprint for radical reform of legal regulation, which it said would contribute to lower costs for both providers and consumers, give more freedom for providers to “grow, innovate and deliver better services”, and generate greater confidence in regulation and legal services more broadly.

This looked at all aspects of the regulatory infrastructure, but of particular interest to Costs Lawyers was that it said the current list of six reserved legal activities needed to be revisited to ensure that regulation was targeted at the particular risks to the public interest.

“We consider that an independent and evidence-based review should be carried out to determine from first principles which activities should attract sector-specific regulation in future,” it said. “For other activities, it would be sufficient to rely on private and public enforcement of general consumer law, and alternatives to regulation such as voluntary schemes.”

The LSB recommended that this review should take place as soon as possible given the time it was likely to take, with the aim of having properly targeted regulation that was proportionate to the harm it sought to remedy.

This would lead in turn to regulation based on the service being carried out rather than regulation by professional title, although there would likely be a core level of regulation to ensure adherence to “professional principles”, such as the duty of the court, confidentiality, avoiding conflicts of interest and so on.

The LSB went on to reiterate its support for regulation being entirely independent of representative bodies, and it concluded that the regulatory approach it was suggesting was best suited to a single regulator covering the whole sector.

It said this would reduce the duplication and fragmentation of the current system, increase transparency and clarity for consumers and providers, increase accountability by simplifying governance arrangements, enhance consistency of regulation, and ensure there was a more coherent over-arching framework, avoiding “a situation where resources are spent on issues of low overall consumer or public impact simply because a dedicated regulator exists for that part of the market”.

Costs-capping rule changes

The 85th update to the CPR, introducing changes in relation to cost capping orders in judicial review cases, came into force on 8 August 2016. They do not apply to an application for judicial review where the claim form was filed before that date.

The changes mean that costs-capping orders in non-environmental judicial reviews have replaced protective costs orders, as per sections 88-90 of the Criminal Justice and Courts Act 2015.

Where the court makes a costs capping order limiting or removing the applicant’s liability to pay costs, the order will include a ‘cross-cap’ limiting or extinguishing the other party’s liability to pay the applicant’s costs should they lose.

The rules provide that an applicant for a cost capping order should set out why an order should be made, having regard to the Criminal Justice and Courts Act 2015.  

A summary should be provided of their resources, including major assets and likely future contributions from third parties; a summary of the costs the parties are likely to incur through the proceedings; and, if they are a body corporate, whether they can demonstrate they can meet likely liabilities arising from the claim.

The court will consider the financial resources of the parties when determining whether to make a costs capping order and, if one is appropriate, what the terms of that order should be.

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Costs News
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15 Sep 2016

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